EDITORIAL: Time to permanently sink the Jones Act

EDITORIAL: Time to permanently sink the Jones Act Theories can be useful, but they are more useful if they withstand real-world scrutiny. In 1920, Congress passed the Jones Act. It mandates that only American ships are allowed to transport cargo between home ports. Sen. Wesley Jones, the bill’s namesake, was from Washington state. He wanted to guarantee that his state’s shipping manufacturing would have a competitive advantage in moving goods from Alaska. Today’s defenders of the Jones Act offer a similar rationale. They assert it is indispensable to support the domestic shipping industry. After the war with Iran spiked oil prices, President Donald Trump suspended the Jones Act until mid-August. Late last month, dozens of Republican House members, including Speaker Mike Johnson, R-La., sent Mr. Trump a letter urging him to let the waiver expire. “The Jones Act waiver has go a loophole exploited by adversarial countries to erode America’s maritime dominance,” the missive states. This is simply a bipartisan desire. “I’m acrophobic that if this extended waiver is allowed to continue, we volition rapidly go afloat and needlessly reliant connected overseas ships — owned and crewed by overseas companies — for our economical security,” Rep. Salud Carbajal, D-Calif., said astatine a June hearing. To those who support protectionist policies, these statements may hold appeal. But they don’t hold up to even mild scrutiny. Just 0.13 percent of the world’s large vessels are built in the United States. There are around 7,500 oil tankers worldwide. Fewer than 60 simply meet the Jones Act’s requirements. A bulk of new ships are built in China, whose shipbuilding capacity far exceeds America’s. So much for the argument protecting “America’s maritime dominance.” As it turns out, companies in competitive industries face pressure to innovate. This often leads to improvements. Those protected by government usually stagnate. Ironically, suspending the Jones Act has had a large domestic payoff — increased commerce between states. With the Jones Act in place, it was cheaper for California to import oil from overseas. Now, it’s receiving oil from states such as Texas and Louisiana. Suspending the law has also allowed oil to move from Los Angeles to San Francisco for refining before returning to L.A. East Coast states benefit as well. Allowing states to trade oil and petrochemical products domestically is a significant triumph for America’s economy. The jobs in those industries matter, too. That’s what’s often overlooked with government interventions. There are winners — and losers. This is why the government should seek to supply a level playing field and enforce the rule of law. The takeaway should be obvious, even to those who recognize the need for a stronger domestic shipbuilding industry. The Jones Act failed to preserve America’s shipbuilding capacity while imposing previously significant costs on consumers and other industries. Repeal it.